Saturday, January 18, 2014

"The belief in markets is a religious belief. Rationally, we know of all kinds of fundamental, what are called, 'inefficiencies' in markets. But the belief that they can solve everything and that everything can have a value determined by the market, I think you can regard that as a religious belief. The other day I happened to be reading a careful, interesting account of the state of British higher education. The government is a kind of market-oriented government and they came out with an official paper, a 'White Paper' saying that it is not the responsibility of the state to support any institution that can't survive in the market. So, if Oxford is teaching philosophy, the arts, Greek history, medieval history, and so on, and they can't sell it on the market, why should they be supported? Because life consists only of what you can sell in the market and get back, nothing else. That is a real pathology. . . .

" . . .. the beliefs are nuanced. The advocates of markets typically don't want them for themselves, they want them for others. Let's say you are the CEO of J. P. Morgan Chase and you may advocate markets, for others, but you don't want them for yourself. You want the government insurance policy that enables you to survive. And as soon as you get in trouble, you run, cap in hand, to the taxpayer and say, 'save me.' In fact, the bailouts are the least of it."

"There is a recent IMF study that tries to estimate where the profits of the big banks come from, and they conclude that they come almost entirely from the government insurance policy, not the bailouts, but the access to cheap credit, the higher credit-ratings because the agencies know you are going to be saved, and the chance to take risky and highly profitable transactions because you are not in danger if it breaks down. And, of course, what is called 'systemic risk,' the impact on others, isn't part of a market interaction, which is - suppose you sell me a car. In a market structure you are supposed to ask what is the best deal for you and I am supposed to ask what is the best deal for me. We are not supposed to ask what is the best deal for him [someone outside the immediate transaction], but there is an effect on him: there is another car on the road; there is more pollution; there are more traffic accidents, and that multiplies over the society. It can end up being a huge cost. Those are called externalities.

"If the externalities are internalized, that is, if we had to pay for those consequences, probably only the super rich could ever drive a car. And there is no way to estimate those consequences. It would be an impossible calculation. How do you figure out what the cost is of the fact that five years from now he will have an accident, or get lung cancer or something? There is no possible way to do it.

"There are what people call 'libertarian economists' (a strange notion) who think you can calculate all of these things and life could be run by some sort of huge computer that makes every action you carry out a market transaction. Gary Becker, of the University of Chicago, a Nobel Laureate, received a Nobel Prize for things like this. Marriage, he argued, is an economic transaction. You measure the quality of the person, the possible gain you will get from being with that person, the loss that will come along because of conflicts, and somehow out of that estimate you decide to get married. It is literally pathological.

"There are economists of that nature who argue against the existence of roads because why should I pay for a road in the other part of town that I am never going to use. That undercuts my liberty, my freedom. So, if you believe in freedom you are against that. Well, then, how do you get roads? If I want to drive from my house to MIT, I build a road. Then comes the question: "How do I keep other people from using it?' Easy, I hire an army. Suppose they hire a bigger army. I hire a still bigger army. That way we are all free. It is as if some fiction writer imagined a concept of hell, it would be a market society."

-----Noam Chomsky, excerpted from "The Most Dangerous Belief," Z Magazine, January 2014

Wednesday, January 15, 2014

"It will be a bitter pill for people to swallow--the
idea of having less so that big business can have more. Nothing that this
nation or any other nation has done in modern history compares with the selling
job that must be done to make people accept the new reality."

Business Week editorial October 12, 1974:

The “new reality” spoken of above was old capitalist private
profit-public loss economics. It only seemed new to those raised in a time that
averted total systemic collapse under what is now being called “unbridled
capitalism”, by those who still seem to think a terminal threatening pandemic
can be treated with band aids, aspirin and cough syrup. Getting people to
believe that is part of the selling job that seems to have succeeded among
consumers still under the total control of corporate mind management. Their
numbers are shrinking.

The improvement in the lives of workers who became a middle
class by receiving credit cards and other debt tools with which to consume all
it produced and more, lasted from the end of the second world war to the 1970s.
It was preceded by that devastating event that destroyed much of Europe, the
Pacific and points between, leaving America untouched militarily and
unchallenged economically. Prior to that war, the “New Deal”, a social
democratic policy to help capitalism survive the Great Depression, created job
programs that helped a crippled society. But it did not become healthy again
until that war and its forced production of greater military might and full
employment. Only the military budget has grown bigger, and more dangerous to
humanity since then, while the employment tank is anything but full and moving
dangerously close to empty.

One generation of workers in the developed western world
became middle class, but only at the expense of many of its own and even more of
a third world population that may have suffered more than in its colonial past as
profits sucked from its resources enabled the rich western minority to have
some of its excess trickle down to this relatively privileged working class.
Those privileges have been slowly stripped away since the time of that opening
quote, with wages, pensions and jobs themselves all declining for a global as
well as American majority. Meanwhile, wealth has increased scandalously for minority
upper classes that also span the globe in what the high priests, rabbis and
mullahs of corporate capital call a “new” economy. And they are echoed by their
fundamentalist parishioners still under the sway of the “selling job”, but this
is a very old economy dating back to at least the 19th century, and
possibly going back even further in its roots to biblical times. Whenever it
started, it’s time to bring it to an end, before all of us suffer that fate.

Making life better for some at the expense of most is what’s
wrong with a profit and loss market system controlled privately by capitalists.
Any maintenance of that system under the guise of making things better in the short
term while continued social disintegration is assured for the long term will
keep humanity on the path to failure. Evidence is overwhelming that even
positive reforms undertaken without connection to a program for total
transformation of the system will only make our problems worse. Much worse.

As one among countless examples, the attempt to fight carbon
pollution by putting profit and loss economics in further control of carbon
production is truly putting not only the fox but the wolf, the hyena, and as
many other predators imaginable in charge of the hen house. Just as dangerous
in a time when we should be drastically reducing - as a prelude to ending - our reliance on fossil fuel is the
deadly fracking technique said to soon make the USA the biggest producer of
fossil fuel in the world. Such measures will bring increasing stress to an
environment already threatening humanity’s future. Even the 1% would ultimately
suffer, though seemingly so far in the future that their professional class
servants can disregard such beyond-our-lifetime problems and continue supporting
existential live-in-the moment crackpot consumerism.

Of course these things and more will produce jobs and
profits, but so does war, poverty, disease, famine and plague. That’s what’s
wrong with a system that always profits some for doing just about anything,
including killing people.

It isn’t necessary to have evil, greedy monsters in control
of institutions that serve such a system. The nicest people who do their jobs
with the highest intentions are part of the problem. The system in which
they/we carry out our assignments needs to be confronted and transformed.

If a devastating earthquake were to strike the San Francisco
Bay Area and kill thousands while destroying most of that city and its
surrounding communities, great profits would be created for private firms
collecting the dead, helping the wounded, cleaning up the debris and rebuilding
the area. They would not be bad people and most might well do their jobs with
the highest ideals. The humanitarian owners of a business which pays its
employees well and gives them wonderful benefits will still have to lay them
off if business is bad, since that is the nature of the system. And if that
business is producing band-aids, the less people bleed the worse it will be for
those wonderful employers and their workers. Auto collisions? Wreckage? Broken
bodies? All are part of the economy of profits for some, at obvious loss to others.
That is why we call it a “gross” domestic product; in essence, it is truly
gross.

Creation of and cures for disease both create profits.
Fighting wars and struggling for peace are profitable ventures, especially for those
not doing the fighting or struggling but merely producing weapons, banners,
programs, battles and counter battles. Nothing, absolutely nothing, is produced
or distributed unless it creates a private profit. And that works very well,
for some, but always at a loss to far more. That does not happen simply because
one corporation is run by greedier people than another; it happens because
private profit making corporations are the rule, the norm and the only reality.
Until they are replaced by democratically owned and operated businesses which
are run on behalf of the greater good for the general population, the system
will continue to get worse.

Whether dubbed local, state, municipal or global policies, all
adhering to profit and loss capitalism are parts of a system that is ravaging the
earth and a majority of its people while making a small group wealthier beyond
the dreams of even those who still remain under the sway of the selling job.
The number of global billionaires increases as global poverty skyrockets, and
this is duplicated in essence if not in numbers in the western nations formerly
rewarding their workers and now reducing them to a growing class of working
poor people.

Replacing villains with nicer people won’t do much good if
the system they maintain continues to produce and distribute the wealth of life
only on the basis of creating a private profit for some, since that will always
mean a public loss for most others. And as is increasingly clear to anyone who
will look beyond the short attention span selling job of consciousness controllers
to the actual reality, the loss is being shared by larger and larger groups as
the profits accrue to ever-smaller numbers. We need to turn that around,
totally, and not just in parts. Many small reforms can lead to a social transformation,
but only if they are understood as, and undertaken for, that larger task. We need
a public-profit selling job to counter the propaganda campaign that continues
telling us making a few people rich is a great way to advance humanity. Yeah,
right.